In this article I am going to Explain how to resolve the error "Sql Server Setup Failed Setup Account Privileges while installing SQL Server" We used get the above error while installing. To resolve the error we needs to change the some Local Policy settings to the current user we are going to see the steps below for the solution.

A new installation of Microsoft SQL Server 2012 or Microsoft SQL Server 2008 R2 failsYou see the following error message when you try to install a new instance of SQL Server 2012 or SQL Server 2008 R2:Rule "Setup account privileges" failed.

The account that is running SQL Server Setup does not have one or all of the following rights: the right to back up files and directories, the right to manage auditing and the security log and the right to debug programs. To continue, use an account with both of these rights.

To Resolve this most of us used to giving permission to the folders and C drive and all .But The Reason for the above error is, when we trying to adding the user account that is running the Setup as a local administrator, the Setup user account requires the following default user rights for the Setup to be completed successfully. when we not set this error will occur,

To resolve this error We needs to change the below things in Local Policy Editor,

How to Edit the Local Policy Objects:To add the rights to the local administrator account, follow these steps:1.Log on to the computer as a user who has administrative credentials.2.Click Start, click Run, type Control admintools, and then click OK.3.Double-click Local Security Policy.4.In the Local Security Settings dialog box, click Local Policies, double-click User Rights Assignment, and then double-click Backup Files and Directories.5.In the Backup Files and Directories Properties dialog box, click Add User or Group.6.In the Select User or Groups dialog box, type the user account that is being used for setup, and then click OK two times.7.Repeat the procedure for the other two policies that are mentioned in the "Cause" section.8.On the File menu, click Exit to close the Local Security Settings dialog box.

Images I shared below for the reference:Selecting Local Policy Editor:

Editing The settings:

After this select the privilege and double click add the user or group and give ok for the selected user thats it and try to do the same for Debug Programs and Manage auditing and security. now try the SQl Installation it will work perfectly.

Thanks for reading.

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